Vol 17 (2020) - Issue 1

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Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd; Cannon Corporate Limited v Primus Build Limited [2019] EWCA Civ 27

Synopsis

These joined appeals considered the relationship between the construction adjudication process and the insolvency regime. It was held that a contractual right to refer a claim to adjudication is not altered by the entry of one of the parties into insolvency proceedings. However, if the decision of the adjudicator is unlikely to be enforced as a result of the insolvency proceedings, the court may, in its discretion, prevent the adjudication from continuing. Whether or not an adjudication is likely to be enforced will depend on the facts: whereas a claim is likely to be futile if one of the parties is in insolvent liquidation, the position may be different if the insolvency proceedings designed to restore the company to financial health, such as a CVA. More generally, any objection to the jurisdiction of an adjudicator needs to be made promptly and clearly, otherwise the party will be taken to have waived the right to object.